A systematic critique of Bitcoin's value proposition

The single biggest threat to BTC isn't that. It is tokenized BTC. As soon as enough people realize that there is a lot more utility to bitcoin, as a tokenized version, on other networks, they might stop using bitcoin itself. I did that years ago.

I love how everyone responding to you seems to think that this is fine because you can just continue dividing the currency, as if the problem is a technical one, and seem to be ignoring or unaware of the actual problem:

Constant deflation is HORRIBLE for any economic system. By design it rewards early capital holders and punishes you for needing to make any transaction. It disincentivizes doing anything. You are always better off not spending money. This may sound good to idiots who just like "line goes up", but that makes normal people not use that system if they have the option.

Bitcoin, by design either on purpose or through negligence and a lack of basic economic knowledge can only ever reward the original whales and harm normal users of the system. Hoarding is the only rational position. That's what crypto proponents push for, because they are already bought in and want to reap the rewards. It's always hilarious and infuriating when they claim this system is more equal, more distributed, or more egalitarian than any other.

> The cost of a 51% attack drops dramatically if you can rent the necessary hardware rather than buy it. Bitcoin mining hardware is available for rent. Would carrying out a 51% attack on rented hardware be possible? Would it be practical? A back-of-the-envelope calculation indicates that the answer to both of these questions is "yes", indeed, that it might be even worse than possible and practical, it might even be profitable.

If it was possible (let alone practical, let alone profitable), it would've happened by now. The article acknowledges this, but doesn't quite grasp on why - that being that the rewards and difficulty are not static. By the time one's able to rent 30,000 of the article's proposed 3.3GH/s miners, the number of hashes required to win a block would be accordingly higher.

Had this article been written a decade ago, it would've likely proposed a hash rate that's readily feasible today - and it would still be dwarfed by the increase in difficulty.

> Bitcoin can be inflated through chain splits and also by policy.

Chain splits do not inflate Bitcoin. They inflate the supply of cryptocurrencies overall, but there is precisely one Bitcoin, that being the "one true chain". Bitcoin Cash is not Bitcoin, and the chain split that produced the former did not impact the latter in the slightest; they are entirely separate currencies, and always will be.

As for "by policy", it's possible in the sense that a camel passing through the eye of a needle is possible: a lot of work, and the camel would in all likelihood cease to exist as such. Such a policy change would itself result in a split chain, and it's entirely possible/probable that the unaltered chain would continue on its merry way. In other words: the chain with the altered policy would not be Bitcoin (at least not without the global network of miners and nodes agreeing to it), for the same reason that Bitcoin Cash is not Bitcoin.

> I'll just point out that irreversibility is no panacea. If it were, it would be universally adopted as the de facto standard.

It was the de facto standard for nearly the entire history of the very concept of currency. Cash transactions are already irreversible, and legal systems have managed fine with that fact for hundreds (if not thousands) of years.

Likewise:

> In particular, if you lose your keys, or entrust them to a third party who decides to defect, then you have no recourse.

If you lose your cash, or entrust it to a third party who decides to defect, then you have no recourse.

> In fact, it is arguable that the rise of bitcoin was the catalyst that birthed ransomware as a global industry. A thief can now steal your money with impunity from the comfort of their own living room.

Theives have been able to do that with gift cards, wire transfers, check fraud, and countless other non-cryptocurrency media of exchange for about as long as telephones have existed. Bitcoin being the catalyst of nefarious acts long predating it is certainly "arguable", but even Elastigirl would pull a muscle or two in doing so.

> I think the main value of Bitcoin in the long run will be as a store of value, comparable to precious metals but easier to move around.

I agree with this. Between Lightning and the umpteen million cryptocurrencies iterating on Bitcoin's design, I don't think Bitcoin needs to be the currency of choice for day-to-day transactions, but rather for moving large sums of money around and storing it relatively securely (in the technical and valuation senses).

Outlawing Bitcoin assumes quite some things.

1. The governments are competent and could do outlaw it - The outlawing of guns, drugs, alcohol, tax evasion seems to have had the opposite effect. 2. For all of the flaws of western governments, they are still within some kinda laws. Coinbase is a public US based company. They are entangled with pension funds, hedge funds, rich people. I am sure they would fight against this 3. This also assumes people follow the law. In general, people follow the law but when they see their banks implode, prices going like crazy, they lose their job... Well then they might not. 4. This also assumes the current system could survive. If you look at the math you'll see that there are not enough currency to pay of the debt. It is increasingly more levered system that is breaking apart.

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